The unprecedented speed, versatility, and capacity available through which information can be communicated and disseminated over the Internet have revolutionized the business and practice of numerous industries. These features, in conjunction with the popularization of Internet usage have enabled the rise of entirely new fields of commerce. Not surprisingly, the number of commercial transactions conducted over the Internet has increased commensurately as a response to increases in both Internet users and consumer confidence in security measures available to transactions over the Internet. As a result, advertisement over the Internet has emerged as an important and lucrative market.
Advertisement over the Internet typically includes a textual or graphical URL link representative of the good or service the advertiser is advertising and/or proffering to sell. The link navigates to a “landing page,” generally a webpage belonging to the advertiser, but which may also be a directory of aggregated links to other landing pages of equivalent or similar goods or services. The advent of search engines and popular content-specific websites has further expanded the Internet advertising industry. For example, search engines that generate a search result list from a user-inputted search term have been adapted to incorporate corresponding or relevant advertisements in the returned search result list.
The emergence of advertisement over the Internet, along with the features inherent to the Internet has also expanded traditional methods of calculating advertising fees. Advertisement publishers for traditional advertisement mediums, such as those produced on physical structures (e.g., billboards) or published over media broadcasts (e.g., television and radio), typically charge rates based on physical attributes (e.g., the size or position of a billboard or newspaper advertisement) or for the duration of a discrete increment of time (for radio and television broadcasts). However, the effectiveness of an advertisement (i.e., the consumption or heightened consumer interest directly or indirectly attributable to the advertisement) over traditional advertisement mediums is extremely difficult to calculate with any amount of precision.
In contrast, publishers of advertisement over the Internet, due to the ability to monitor user activity and website traffic, are able to accurately and automatically account for both increased consumption as well as presumably heightened consumer interest. For example, for any advertisement displayed on a website or in a list of search results from a search engine, a publisher of an advertisement (typically the owner of the website or search engine) is able to control and track the number of times an advertisement is displayed, as well as the number of Internet users that navigate to the landing page of the advertisement by clicking through the advertisement (the act of navigating by physically clicking on a URL link, is known as a “clickthrough”).
The rate of navigating users, known as “clickthrough rates” therefore represents the number of Internet users that navigate to the landing page of the advertisement for each display of the advertisement. A “conversion” is a term used for the number of clickthrough users that actually purchase the proffered good or service from the advertiser. Accordingly, the calculation of advertising fees for advertisements over the Internet has developed to include additional metrics to evaluate and account for an advertisement's effectiveness, often by charging additional fees per clickthrough and/or conversion. A typical fee structure—known as a “bidding point”—for an advertiser may include a fee for each “impression” (i.e., a single display of the advertisement to a user) and additional fees for each clickthrough or conversion. Often, fee structures will be structured to strictly adhere to the perceived relevance of an advertisement. However, this approach may achieve suboptimal results.
The relevance of an advertisement to a search term is naturally correlative to clickthrough and conversion rates, and thus, the relevance of an advertisement typically corresponds to the generation of revenue for the publisher of the advertisement. However, strict or heavy reliance on the relevance of an advertisement may not result in the most effective method for advertisement publishers to optimize revenue gain. For example, some new, small, or otherwise unknown advertisers might produce advertisements which are extremely relevant to a search query, however, due to their lack of brand (or product) awareness, Internet users may lack confidence in the products and services of these advertisers as consumers, and prefer more well-known advertisers or products with less relevant advertisements. In cases such as these, both the relevance as well as the history of the advertisements should be considered.
Another example when strict reliance on the relevance of an advertisement is suboptimal occurs as result of advertiser bidding behavior. Advertisers with relevant advertisements but who have exceedingly low bidding points may generate less revenue for search engines and advertisement publishers than advertisers with irrelevant advertisements and high bidding points. Accordingly, current fee structures, due to factors such as inflexibility and/or over-reliance on single metrics may achieve sub optimal results for Internet advertising publishers.